Apple antitrust lawsuit heads to the Supreme Court

Image: Win McNamee/Getty Images

The future of Apple’s App Store may be in the U.S. Supreme Court’s hands.

On Monday, U.S. Supreme Court justices are presiding over a case that will determine if Apple has been monopolizing the iPhone app market through its App Store. At the heart of the issue is whether the tech giant’s App Store practices have forced consumers to overpay for iOS apps.

In 2011, iPhone users filed a class-action lawsuit in California federal court alleging that Apple’s monopoly over the iPhone app market with the App Store, which is the only official source for iOS applications, has led to marked-up prices.

The plaintiffs in the suit claim that by shutting out third part that will determine if Apple has been monopolizing the iPhone app market through its App Store. At the heart of the issue is whether t tech giant’s App Store practices have forced consumers to overpay for iOS apps.

The Supreme Court’s decision will be based on how the justices apply one of its prior rulings. This 1977 decision limited damages from anti-competitive practices. The justices ruled then that those directly overcharged can be compensated but not victims who paid an inflated price passed on by third-parties.

Apple had previously attempted to dismiss the lawsuit, claiming it lacked legal standing. The company was successful in 2013 when a federal judge in Oakland, California threw out the suit. The judge based his decision on the fact that Apple consumers were paying higher fees passed on to app developers and not Apple directly. 

However, last year the San Francisco-based 9th U.S. Circuit Court of Appeals revived the lawsuit, claiming in this case Apple acts as a distributor and was selling the apps directly to its consumers.

In its legal filings, Apple claimed that a decision found against Apple would threaten the e-commerce industry as a whole. According to Apple, app creators made more than $26 billion last year.

The plaintiffs are backed by 30 state attorneys general including New York, Texas, and California. Apple is backed by the U.S. Chamber of Commerce and the Trump administration.